Ralph Lauren, Abercrombie & Fitch furlough retail associates as coronavirus store closures continue
Iconic American fashion companies Ralph Lauren and Abercrombie & Fitch have announced that they are joining many of their industry peers and implementing furloughs of retail associates and corporate salary cuts, among other measures conceived to deal with the challenges presented by the ongoing Covid-19 crisis.
The New York-based company temporary closed its stores in North America in mid-March and has continued to provide full payment to affected retail employees. International retail employees in other regions where the company has implemented store closures, such as some parts of Europe, have also received similar compensation.
However, after April 11, all of these retail associates will be placed on unpaid temporary furlough, along with certain corporate employees.
Furloughed associates will continue to receive regular benefits and will have access to the company’s Employee Relief Fund, which recently received the majority of a $10 million donation made by the Ralph Lauren Corporate Foundation to support emergency relief.
According to the company, it is also working to actively reassign employees across other areas of its business, placing them in roles where they can provide urgent business needs and continuity, or support Ralph Lauren’s efforts to produce medical supplies, such as surgical masks and gowns, for donation.
Executive chairman and chief creative officer Ralph Lauren has agreed to forego the entirety of his salary in fiscal 2021, as well as his full bonus for fiscal 2020, while president and CEO Patrice Louvet has accepted a 50% reduction in his salary for the duration of the health crisis.
All 140 other members of Ralph Lauren’s executive and global leadership team will see their salaries reduced by 20%, with the company’s board of directors also foregoing their quarterly cash compensation for the first quarter of fiscal 2021.
As for the question of supplier payments, the company has committed to pay for finished goods, as well as those already in production, and has established a vendor payments program which, according to the group. In the long term, the company plans to collaborate with industry peers, NGOs and governments to work towards providing new sources of support and stability for factory workers.
Following a short closure, during which health and safety protocols were improved, Ralph Lauren’s distribution centers are now up and running once more.
Abercrombie & Fitch
With the company’s stores still closed in North America and the EMEA region, New Albany, Ohio-based Abercrombie & Fitch Co. announced on Monday that it will be temporarily furloughing all retail staff in these regions starting April 12.
The group will continue to provide benefits for affected associates and will also fund 100% of their health premiums.
Around 15% of Abercrombie & Fitch’s corporate associates around the world will also be affected by a temporary reduction in their work schedule and a corresponding decrease in pay.
Members of the company’s leadership team, from the vice president level upwards, will see their salaries temporarily cut by between 10% and 33%, including all named executive officers and CEO Fran Horowitz. The board of directors’ cash retainer will also be temporarily reduced by 50%, while spring merit rises and promotions have been canceled.
Further steps taken by Abercrombie & Fitch include the drawing down of $210 million under its senior secured asset-based revolving credit facility, the withdrawal of excess funds from its Rabbi Trust, and the suspension of share buybacks.
Copyright © 2021 FashionNetwork.com All rights reserved.